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Table of Contents Anthropic, PBC Notes to Consolidated Financial Statements (Continued) When the Company utilizes CSP marketplaces that distribute the intelligence service to customers, the customer receives the same intelligence service as is available through its web, mobile, and desktop interfaces and APIs, and the intelligence service represents a single promise in customer contracts. In these arrangements, the Company is the principal and recognizes revenue on a gross basis because the Company has a direct contractual relationship with customers, is primarily responsible for providing the intelligence service to customers, and establishes pricing. The CSPs in these arrangements do not obtain control of the Company’s intelligence service at any point prior to transfer to the customer. Deferred Revenue Deferred revenue consists of amounts billed or received in advance of the Company satisfying its performance obligations, and is recognized as revenue as services are delivered to customers. Deferred revenue relates primarily to subscriptions that are subject to usage limits that reset over short periods, which results in revenue being recognized ratably over the subscription period, which is generally 12 months or less. Compute and Infrastructure Compute and infrastructure expenses primarily consist of costs attributable to operating the Company’s technology infrastructure, which supports the full range of workloads for the Company’s models, including research, model development, serving customers, and internal usage of Claude. These costs primarily consist of cloud compute fees paid to CSPs under committed and on-demand arrangements, including storage, networking and connectivity, and related support costs, infrastructure costs associated with serving customer workloads through partner channels, colocation facility costs, equipment leases and committed power costs associated with the Company’s data center operations, and third-party application infrastructure software costs directly related to the Company’s compute operations. Personnel Personnel expenses primarily consist of stock-based compensation, including expense related to stock options, restricted stock units (“RSUs”), and restricted stock awards, cash compensation, including base salaries and bonuses, employee benefits, including health and welfare benefits, and employer payroll taxes. Bartz Settlement Bartz settlement consists of the charge the Company recorded in 2025 to settle the Bartz copyright infringement suit. Refer to Note 13 for further information. Sales, Marketing, and Partnerships Sales, marketing, and partnerships expenses primarily consist of channel partner costs and marketing and advertising costs, including media and public relations spend. Advertising costs are expensed as incurred. Advertising expenses were $33 million and $147 million for the years ended December 31, 2024 and 2025, respectively. Advertising expenses incurred in 2023 were not material. Other Operating and Administrative Other operating and administrative expenses primarily consist of charitable donations expense related to the Company’s donation matching program, vendor costs related to data quality and performance evaluation services, information technology and cloud software costs, payment processing and platform fees, facility and occupancy costs, non-income taxes, professional services costs, bad debt expense, and depreciation and amortization related to non-data center assets. Stock-Based Compensation The Company’s equity incentive plan provides for the granting of stock options, RSUs, and restricted stock awards to employees, consultants, officers, and directors. The Company measures compensation cost for stock- based awards at grant-date fair value and recognizes it over the requisite service period. The Company accounts F-21
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